The Competition and Markets Authority (CMA) has on Wednesday launched a merger inquiry into the anticipated acquisition of meal replacement brand Huel by French food giant Danone.
The competition watchdog confirmed that it has issued a notice to the parties, initiating its phase 1 investigation. The CMA now has until 11 September to decide whether the transaction raises sufficient competition concerns to warrant a more in-depth phase 2 probe.
Danone announced in March that it had entered into a definitive agreement to acquire Huel, describing the move as part of its ‘Renew Danone’ strategy aimed at expanding further into the fast-growing functional and complete nutrition categories.
Huel, which has built a strong presence in the UK, Europe and the US with its ready-to-drink shakes, powders and nutrition bars, has seen rapid growth through both direct-to-consumer sales and retail expansion.
At the time of the deal announcement, Danone chief executive Antoine de Saint-Affrique said the acquisition would strengthen the group’s position in “the new and fast-growing nutritionally complete space”.
Huel chief executive James McMaster said the partnership with Danone would give the business greater infrastructure, distribution and R&D capabilities to support further international growth.
The proposed acquisition comes as demand for convenient, protein-rich and functional nutrition products continues to rise.